Is it time to do a little ''bottom fishing'' in the gold market? Bottom fishing is a term that has been heard lately in the stock market to describe the efforts of some investors to wait until a stock has hit what they think will be its lowest price - or bottom - before buying. The strategy is not recommended by many professional investment advisers.
But with the price of gold continuing a slide that has taken it below $340 an ounce, some people may be thinking now is a good time to invest in a little of the shiny stuff.
Several months ago, when it was selling for about $400 an ounce, we said gold could not really be considered an investment - if you applied a commonly accepted definition of ''investment''; that is, something that involves a certain amount of risk in exchange for the possibility of increasing the investor's net worth. Over the long term, gold has managed to hold its own against inflation, and that's about all. Meanwhile, a well-managed portfolio of stocks and bonds could have boosted an investor's net worth.
Still, many people remember those heady times when, for largely illogical reasons, the price of gold took off. The most memorable of these periods peaked in January 1980, when the price reached $900 an ounce. Memories like that, combined with today's lower prices and forecasts of higher prices in the future (one of the most daring predictions says gold will shoot to $3,000 an ounce by 1986), may be enough to get many more people interested in gold again.
If you think you are in this group, financial advisers say go ahead, but exercise care and think of it as a long-term deal.
''You should think of gold as at least an eight-year proposition,'' says Claire S. Longden, a financial planner with Butcher & Singer, a New York brokerage. ''Unless of course it triples three years after you buy it.''
She does not think people should tie up more than 5 or 6 percent of their investment assets in gold. You can get higher figures from other investment advisers, but seldom more than 15 percent.
For people with sufficient assets and a source of continuing income, Ms. Longden suggests a gold-buying system that is similar to ''dollar cost averaging ,'' a way to buy mutual fund shares. ''Set up a buying program where you buy so much gold every six months, regardless of where gold prices are.'' Someone with 2,500 every six months.
Although Ms. Longden is not one to recommend heavy gold purchases, she does recognize low prices when she sees them. ''Right now would be a good time to start a buying program like this,'' she says.
Having decided how much to put in gold and when to do it, you are then faced with selecting the form: coins, bullion, certificates, mining stocks, or mutual funds.
Among these choices, bullion is probably the hardest, most expensive, and riskiest to store. You can spread coins among several safe deposit boxes, putting a few ounces here and a few there. But if you lose a whole gold brick, it could be disastrous.
Gold mutual funds have been one of the leading performers in recent years. As a group, these funds posted a gain of nearly 400 percent for the five-year period that ended this April, according to Lipper Analytical Services. Three of the biggest funds are United Services Gold Shares of San Antonio, International Investors of New York, and Strategic Investments of Dallas.
For her part, Ms. Longden favors coins. They are, she notes, easy to buy, fairly easy to store, and easiest to sell, and their prices are easy to follow. You can either watch for listings in your local newspaper or call a broker who deals in gold coins.
Another planner, Joseph Mahoney, chairman of the Center for Financial Planning in Braintree, Mass., prefers certificates. ''I have several clients in gold,'' he says. ''I usually recommend certificates from a reliable dealer or major bank with a precious-metals division. This saves on the cost of storage and dealing with all that weight.''
A certificate warrants that you own a certain amount of gold, usually stored in a bank vault. Usually you have to make a minimum initial purchase of $1,000, but with some banks you can buy it with a credit card. Fees and charges will include a 11/2 to 3 percent commission when you buy, a half-percent storage charge, and a 1 or 2 percent fee when you sell.
Warning: This is no time to be looking for anything but the most reputable dealers or banks for your certificates. At least two phony metal storage programs crashed in recent years when it was discovered they did not have all - if any - of the gold or silver they were supposed to be holding for customers, some of whom lost thousands of dollars.
You can also buy shares in the gold-mining business. With high-quality mining companies - many of which are in South Africa - you can expect an annual dividend and the possibility of selling your shares at a profit, if you can stand the volatility. Mining share prices often move up and down faster than the metal itself. When gold prices are up, the miners make money and big investors will quickly bid up share prices in anticipation of higher profits. But when gold starts to drop, these big investors will bail out fast, taking smaller investors with them.
If you would like a question considered for publication in this column, please send it to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass. 02115. No personal replies can be given by mail or phone. References to investments are not an endorsement or recommendation by this newspaper.